ESG & Sustainability News South Africa

Sectoral emission targets: What it means for business

To support the implementation of South Africa's Nationally Determined Contributions (NDC) under the Paris Agreement, the Minister of Forestry, Fisheries and the Environment published the Sectoral Emissions Target (SET) Report (Report) for public comment on 26 April 2024.
Image source: Chayanit Chankhong –
Image source: Chayanit Chankhong –

This development comes at a timely juncture, as the Climate Change Bill (Bill) has just received parliamentary approval and is now awaiting the President's signature to become law. Notably, the Bill includes a provision that mandates emission reduction targets, in line with our global obligations, to be implemented across various sectors, which will be binding when the Bill becomes law. This reiterates the call to action for these sectors to reinvent themselves and meet the growing demand to reduce emissions and align with the SETs.

The SET emerged as an outcome of the latter stages of COP28 which was the first-ever Global Stocktake (GST). Countries were assessed on the progress made in meeting the objectives of the Paris Agreement (which aims to limit global warming to 1.5°C above pre-industrial levels) and are being held accountable for lowering emissions through their NDCs. On the other hand, the shift towards net zero emissions unlocks a combination of financial incentives, as well as large-scale investments.

SETs are greenhouse gas emissions reduction targets, applicable to sectors or sub-sectors over a period. The SETs are designed to steer sectors to make transformative changes to ensure that we achieve long-term climate action.

The Report identifies sectors that are significant contributors to emissions, which will be subject to the SET, these include: mining; agriculture, energy; industry, human settlements (residentials), transport; and environmental sectors.

The implementation of the SET will be monitored annually. The SETs will then be revised and updated in accordance with any changes to the NDC, which is expected every five years while considering the current and projected GHG emissions.

Climate change issues must be considered in investment decisions, and businesses should not wait until specific governmental regulations are implemented to make changes. Companies that transform their business to factor in the risks of climate change and to take advantage of the opportunities presented by the global shift towards a sustainable future will gain long-term competitive advantage.

The Report aligns closely with ESG principles, emphasising the interconnectedness of environmental sustainability with broader societal and governance considerations. It underscores the importance of integrating ESG factors into decision-making processes to drive positive environmental outcomes.

About Garyn Rapson, Nonhlanhla Mnengi, Sabeeha Loonat & Sinalo Matubatuba

Garyn Rapson, Partner, Nonhlanhla Mnengi, Associate, Sabeeha Loonat, Associate & Sinalo Matubatuba, Candidate Attorney at Webber Wentzel
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